Business as Usual – A Relic of the 20th Century?
It’s hard to review any news report today and not find references to “disruption” or “new age of…” or “transformation”. Reports of those who were on the wrong side of change are all too common, while those seemingly few on the right side of change gather fortunes in no time at all. It’s enough to make you wonder if the concept of “business as usual” is a relic of the past. Perhaps it is. Many business owners and leaders struggle with this question every day. While these issues are real for all types of business, middle-market businesses are especially vulnerable to rapid changes in the business environment. The good news is that help is available – regardless of the size of your business. Today we will take a look at how your business can prepare for the future, and not be trapped by business as usual, through a 5-point review of your business. These five points are the result of the experience that I, and others at Newport Board Group, have gained in our efforts to help middle-market businesses adapt to, and thrive in, an ever-changing environment.
Disruption and Transformation – Hallmarks for Today’s World
The business world has always been a rough and tumble place. Fortunes have been made and lost. Business empires have been built only to crash and burn. New products have come and gone. Sometimes all of this happens within a generation, and maybe even a decade or two. Think Beta/VHS, or WorldCom, or even Pokémon GO. But even considering what psychologists refer to as reference bias – our tendency to believe that the recent past is the way things should be – it’s easy to see that the world is rapidly changing under our feet. This creates an especially challenging situation for middle-market business owners. Like it or not we live in a time of rapid change.
Will your business be next?
- Is someone out to disrupt your market, product or customer base?
- Do you need to worry about the unknown hacker? Is your proprietary information secure? What about sensitive customer data?
- Will some new government policy, whether from Washington D.C. or half-way around the world, create new barriers, competitors, or challenges? Or maybe opportunities?
- Is your business prepared for the disaster scenario – caused by weather, cyber, political, or market events?
- What do you do when no one seems to think the way you do?
These are real questions that keep business owners and leaders up at night. Going forward, disruption and transformation are becoming a part of business as usual. As the business world changes, business leaders must adapt.
Real-World Stories from the Middle-Market
Over the past year, I have worked with several middle-market businesses that are:
- facing financial disaster because of the inability to adjust to changes in the energy industry;
- struggling to pull together an acquisition because the target wasn’t interested in change;
- trying to overcome healthcare industry inertia and deploy technology in a way that improves health outcomes and reduces costs;
- working to map out a plan that allows founders to exit a business while leaving a strong and viable business for the future; and
- looking for capital to bring technological change (should I say disruption?) to well-established business sectors.
These are all very different business situations, but they all share at least one common theme – “business as usual” either isn’t an option or an impediment to the future. Maybe we can’t condemn the idea of “business as usual” to the ash heap of history, but it certainly isn’t a good guide for the future.
A 5-Point Plan for Today
In today’s ever-changing business environment, I advise middle-market companies to set aside “business as usual” thinking and take a fresh 5-point review of your business. This is not a formulaic approach, nor is it necessary to undertake the review in any particular order. The important thing is to step back and look at your business and your business environment as they exist today. Think of these five points as five perspectives on your business rather than five discreet activities.
Understand Your Competitive Environment – It is a very competitive world, especially for middle-market firms. The margin for error is small. An honest and thorough periodic review of your business and competitive position – not just against direct competitors, but also in light of broad market trends and forces (the neighborhood video store didn’t fail because of competition from other video stores) – is a vital part of any successful venture.
Identify the Goal – This concept goes by many names (goal, purpose, brand promise, vision, mission, etc.), but the key thing is to have a clear view of what you are trying to do and why that is important. A trusted-advisor can help you with the process. The concept of a goal really isn’t as abstract or touchy-feely as it seems, but an independent, experienced perspective can be very helpful, both to the process and the result.
Assess Your Capabilities – The first two points are largely outward-looking, but this third point is focused on you and your organization. Again, brutal honesty is key. Do you have the right people (based on skills and abilities, not just loyalty) in the right spots and armed with the right tools? Does your culture help or hurt you? Do you have the right financial resources to do what you need to do? Will your existing business systems allow you to be successful in the future?
As you go through this exercise be mindful of the gaps you are likely to find. You probably don’t have everything you need or want, so be prepared to admit there are gaps and look for ways to fill them. Do be brave. Don’t sweep inconvenient, or uncomfortable, outcomes under the rug.
Map Out a Strategy – Strategy can be a frightening word. Haven’t Harvard Business School professors been producing tomes on strategy for decades? Who has time to figure out all of that? Can a mid-sized business afford all that work? Fair questions, but don’t confuse form with substance. Strategy is important, but it doesn’t have to be elaborate. Strategy is as simple as a basic statement of how you are going to use your resources to achieve your goals in light of the competitive environment in which you operate. A strategy doesn’t need to be more than a few well-crafted sentences, but it does have to make sense based on your competitive environment, your goals, and the capabilities of your organization.
Execute, Execute, Execute – Now comes the hard part. All of your hard work will be for naught if you don’t maintain a keen focus on execution. Clear goals and metrics facilitate successful execution, but a relentless focus on communication, beliefs, behaviors, and performance metrics are required for sustained success.
Find the Right Advisor
As simple as this 5-part review of your business sounds, it is a major undertaking. Outside resources can provide valuable expertise, experience, and perspective as you move through the process. Extra arms and legs, as well as eyes, ears, and brains are a huge asset. Don’t hesitate to get the help you need to ensure that your business is not doomed by “business as usual”.
Newport Board Group partners are available across the country to help advise you as you lead your business away from business as usual to a sustainable and successful future. We work with business owners and leaders in a direct, one-on-one manner, to create the right plan for the facts and circumstances of your business today. The 5-point approach described above is just one of many approaches we can take to help your business with its specific challenges. Our partners always welcome the opportunity to meet with middle-market business leaders, to hear your stories of success as well as descriptions of your challenges. Newport partners are always ready to roll up their sleeves and help.